A PROGRAM FOR T ELCO C OMPANIES IN W ISCONSIN Arthur Middleton
Hughes VP The Database Marketing Institute
Slide 2
Its a big state. Someone has to provide the phone service for
5.5 million talkative folks.
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L AND L INES ARE IN TROUBLE US Phone Landlines Per 100
Population US Statistical Abstract
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C REATIVE D ESTRUCTION Monopolies have become competitive Cable
is muscling in on phone companies Phone companies are fighting back
with TV Both are offering the internet Wireless is stealing from
both You have to offer many services to survive
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C ELL P HONES T AKING O VER Annual Household Spending on
Telephone Service
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Y OU HAVE TO OFFER EVERYTHING
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T HE EFFECT OF BUNDLING Every additional product that you add
improves loyalty and reduces churn by 25%. Adding products boosts
revenue AND improves the retention rate of land line customers
Slide 8
T O KEEP SUBSCRIBERS, BUILD A M ARKETING DATABASE A database is
more than a list of subscribers It is a tool to use to retain
subscribers and to sell them additional products
Slide 9
M ARKETING D ATABASE FED FROM O PERATIONAL D ATABASE The
Marketing Database can be outsourced to a vendor. Advantage: keep
the costs down, and control what he does. This is your in house
billing database
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D ETERMINE THE LIFETIME VALUE OF YOUR SUBSCRIBERS We are
looking at the career of 60,000 subscribers over a three year
period. The lifetime profit from each of the 60,000 is $96.33 To
beat that we have to improve something.
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W HAT CAN WE DO TO KEEP THEM ? Communicate with them often Put
them on automatic paper-free billing Sell them a second product:
DSL, TV
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E FFECT OF ADDING DSL Churn rate down ARPU Up CCPU up CPGA up
Revenue up Lifetime value way up.
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DSL B OOSTS P ROFITS
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A DDING TV: T HE TRIPLE PLAY The LTV has gone down. Why? It is
expensive to add TV -- much more than to add DSL. And, the churn
rate has gone up? Why? Competition from Cable and Satellite.
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TV IS NOT A WORLD BEATER There is more competition with TV:
Cable, Satellite, and over the air. But TV and Wireless are
important ways of staying in the game and keeping your customers.
The main way to win: communicate often.
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W HY COMMUNICATION IS VITAL All Wisconsin Telcos have
additional services to sell. All have churn problems. Solution: set
up regular e-mail communications with all subscribers. Use those
communications to sell more services, and keep from losing the
subscribers you have now.
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E- MAILS : L OW C OST S ELLING
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E- MAIL VERSATILE AND INEXPENSIVE
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F IRST STEP : A UTOMATIC B ILL P AYING Stop by or call us You
cannot do this on line. What is the benefit to the subscriber?
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YOU CANNOT SIGN UP ON LINE IN W ISCONSIN Visit or call our
office
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S EE HOW AT&T D OES A UTO B ILL P AYING
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W HY AT&T AND V ERIZON SEND E - MAILS Automatic Bill Paying
is the entry point for monthly e-mails that promote additional
products. This is why they pay you $10 or $15 for signing up.
Slide 23
S UPPOSE W ISCONSIN T ELCOS USED A COOP EMAILING SERVICE One
company could provide online bill paying service application
service with a link on each Telco website. Each subscriber would
get a weekly e-mail from his Telco, with local news, sports news,
and what is on TV this week, plus info about Telco products. A coop
e-mail and text mail service might reach most of the households of
WSTCA members with news and promotions from their local Telco.
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E ACH T ELCO GETS THEIR OWN E - MAIL SERVICE
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W HAT DOES IT COST TO SEND E - MAILS TO SUBSCRIBER HOMES ? 52
e-mail campaigns per year to for 20 Telcos with 6,000 subscribers
per Telco. Cost $10.00 per thousand. Cost per Telco per year 20
companies participating, perhaps $3,120 per year for the delivery
plus $12,000 per year for the part time editor. What would be the
benefits?
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A SSUMPTIONS Assume that 20 Telcos participate. There are 52
e-mail campaigns per year. There is a monthly contest for e-mail
subscribers. One winner of $5,000 per month. To enter: click on an
entry box in the e-mail. Nothing to buy. Each Telco designs their
own e-mails. Each has one part time editor @ $1000 per month
developing e-mail copy.
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W HAT WOULD BE IN THE E - MAILS ? What sports, events and
movies would be on TV this week time and channel Local results of
local sports teams. Video of local sports supplied by teams, and
their supporters. Local to the Telco area. Every opened e-mail is
an automatic entry in the monthly $5,000 contest. Nothing to buy,
Ads from local merchants Ads for Telco products
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B ENEFITS OF THE E - MAILS Assume each Telco has 6,000 e-mail
subscribers The open rate is 30% because of the $5,000 prize per
month. One half of one percent of the e-mails result in a sale of a
Telco product (DSL or TV or PC) with an annual revenue per product
of $419.40 Note, average sales due to e-mails from other companies
varies from 0.5% to 3%. Resulting sales per Telco per year
$196,279
Slide 29
D ETAILS OF THE E - MAIL PROGRAM Assume a phone company with
6,000 subscribers who sign up for e-mails. Assume 20 Telcos sign up
as members to send emails Assume a part time local e-mail editor
who gets $1,000 per month for creating the four e-mails sent out by
the Telco Over three years the e-mail marketing program could
produce total profits of $362,350 per Telco
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S ERVICES PROVIDED BY THE E - MAIL VENDOR COMPANY Link to sign
up subscribers and auto bill payers for each member Telco. Telcos
do their own billing, and receive all revenue directly from
subscribers. Maintain a central database of subscribers for each
Telco. Send e-mails from this database. Telcos can access DB on
line and do segmentation. Use cookies so Telco websites and e-mails
are personalized. Shopping cart in e-mails so subscribers can buy
services from Telcos on line. Deliver all e-mails for the Telcos.
Provide a template to each Telco for them to enter their own
content for the e-mails.
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H OW TO GET STARTED WSTCA enlists members in the project. Get
at least 20 to sign up. Set up an e-mail corporation with each
Telco an owner. WSTCA drafts an RFP for a company to provide the
services. Selected vendor creates software for each Telco website
to enlist auto bill payers, subscribers, and shopping carts to sell
Telco services. Sends both e-mails and cell phone text content.
Creates the monthly contest.
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G ET THE BOOKS Arthur Middleton Hughes VP The Database
Marketing Institute, Ltd.
[email protected]@dbmarketing.com 954 767
4558
